The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, JANUARY 31, 1928. ECONOMY AND TAXATION.

Hokitika Guardian, 31 January 1928, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, JANUARY 31, 1928. ECONOMY AND TAXATION.

The general financial situation ol the majority of the world countries gives jjenty of food for thought a-s to measures necessary to mend the stringent situation. Our own Dominion is not any different to any other country, so that we are as much involved in the issue as any other place. The Motherland has had its peek of trouble—still has, and there are thoise studying the general position and offering much valuable advice. There are of course different angles from which the situation might be viewed and tackled. In the ease of a private individual who found his finances drifting and his plight becoming difficult, his first move would he to study internal economy. Economy would bo the first tiling, and lie would overlook those branches of lies trading concern in respect to which he might effect savings with the object of tiding over a difficult period. Something .similar naturally suggests itself with regard to the public finances. Does the Government expenditure account to extravagwe in any particular, and if so, is it not possible to place the finger upon some part of the administrative. machinery wherein savings might be made to assist in easing the stringency? It is possible by this internal economy enquiry to reduce expenditure found to be excessive, and in that event it would 'he- possible to give .some relief in taxation. A saving in regard to outgoings should assist to modify income receipts, and the natural effect would be to reduce taxation. Such a step would have some effect on the uplift of trade. T( is conceivable where taxation is very high, a.s in the ease of Great Britain, that a reduction lias groat possibilities on tile' trading side. Special provisin has to be made to meet taxes, and the money being earmarked specially it is withdrawn from trade. Every’ pound so set aside contributes to lessened trading and the effect can be magnified into serious stagnation when the figures are as large as they are in England. It lias been laid down in respect to Great Britain that excessive public expenditure depresses the public. credit- and raises the rate of interest, and that in turn depresses industry by restricting consumption and raising the cost of production. The effect of high taxation is io directly increase unemployment and diminish capital. These financial results create the stringency to-day being cx|>erieneed, and should remind us of the necessity for economy so that flic taxation burden may be lessened. So far i as the public administration is concerned in most countries, there i; the tendency to extravagance. This proneness is specally marked in denioodaltio countries nowadays. The old order is changing. In our own Dominion new departments are created and manned with remarkable felicity. Once a new department is created it expands with celerity. The machinery of the general Government is certainly well manned, and the administration is not lacking in officials. The civil service is well loaded in that respect even to the point of over-government. It was the fashion in the time of the Liberal regime to rail against the numerical strength of the public service, but in those days the service was a lilliputlan army, compared to the hosts considered necessary to-day to perform the public service. A natural increment might lie expected with expansion in population and trade, hut the increase lias been wholly abnormal—the work of those who when in opposition I were the critics of the Liberals, TTn- I

fortunately the well packed civil service does not exhaust the extravagance in the public administration today. The Government is all too ready to assist with bonuses anti subsidies merely avenues of ordinary trading which should nuitcruli.se out of their own inherent strength. F.vcn growers arc aide to attack the Government successfully, and are placated with a gift of money to be provided from more taxation. .So the stringency is sustained, an overshadowing pall upon national progress. The country has gut to wake up to the effect of the drain and Lbc strain outlie national li mi in-os ii' material relief is to come 'o pass. Economy must take the place it' extravagance if the taxation is to 'ic reduced, and noire money freed for its natural a veil lie in promoting trade mil industry.